It looks almost certain that the CEO of Fletcher Building is gone.
The company put the shares in a trading halt yesterday, and announced that Ross Taylor would be reconsidering his position. Which says to me- he’s resigning tomorrow.
I can’t see a way for him to come out and say he’s not resigning after that statement’s been made.
And if he does go, which seems more likely than not, I doubt very much he’ll be alone. I suspect there will be other members of the executive - and maybe even the board - walking out that door with him.
And I don’t think anyone's gonna cry any tears over this. Fletcher Building is not a business that you can argue is doing right by its shareholders.
There have been calls for the board and the CEO to resign for at least two years, because the company just keeps lurching from one problem to the other.
There was the high rise disaster, then the convention centre disaster, then the GIB board disaster, then the pipes problem over in Australia, and then just last week- the $180 million cost blow out on the Convention Centre and the Wellington parking building.
As Sam Stubbs from Simplicity pointed out when he was on our show calling for the resignations last week- in the last two years, the NZX has gone up 7.5 percent and Fletcher Building’s shares have gone down 16.5 percent.
That’s not average performance, that’s a very bad performance.
Meanwhile, the directors asked for a 25 percent pay increase last year, until they got told that was a bad idea and withdrew it.
- Simplicity calls for Fletcher Building's board to be scrutinised following cost blowout
- Fletcher Building: $180m extra for NZ International Convention Centre, car parks
- Milford Asset Management expert: What can Fletcher Building expect following their multi-million dollar loss?
- Analysts concerned as Fletcher Building takes $180 million financial hit
- Fletcher Building in trading halt over Australian pipes problem
And Taylor, if you listen to the analysts, gets paid about three times what other CEOs of similar sized listed companies get paid.
There are significant shareholders who are pretty cross, and I don’t reckon they’ll settle for just Ross Taylor’s scalp tomorrow. I would expect not just one resignation.
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